Blog Entry March 2012

Are there hotter topics these days than data security and kids’ privacy?  An FTC law enforcement settlement with the social networking site RockYou ticks both of those topical boxes and challenges a course of conduct the FTC says made it easier for hackers to access the personal information of 32 million users.  The complaint also alleges the company collected info from kids in violation of the Children’s Online Privacy Protection Act.

In a world of smart phones and smart grids, the smart money is on companies that play it smart with consumers’ information.  Consistent with its 40 years’ experience protecting consumer privacy, the FTC’s just-released Report — Protecting Consumer Privacy in an Era of Rapid Change:  Recommendations for Businesses and Policymakers — underscores that message and outlines a new privacy framework design

Through a series of recent law enforcement actions, the FTC has articulated what should be apparent:  that truth-in-advertising principles apply to affiliate marketers and to the companies that use them to promote their products.  A settlement announced today by the FTC makes a similarly obvious point: The law applies to affiliate marketing networks, too.

If you or your clients work in the multi-level marketing (MLM) arena, a decision by a federal judge in the FTC's lawsuit against BurnLounge, Inc., merits your attention. The defendants — the company, the CEO, and top salesmen — used claims of hefty profits to sell opportunities to run online digital music stores.  According to the FTC, the outfit masqueraded as a legitimate MLM program, but really was an illegal pyramid scheme.

If you have clients in the auto industry, you’ve seen the ads:  “We’ll pay off your trade no matter what you owe . . . even if you’re upside down.” It’s an attractive claim to people struggling with their finances. But law enforcement settlements announced by the FTC with five dealers from around the country demonstrate the importance of giving people the straight story when making promises about trade-ins where negative equity is involved.

South Dakota can be lovely this time of year, but consumers struggling financially shouldn’t have to travel there to respond to actions filed against them in a tribal court that doesn’t have jurisdiction over their case. That’s what the FTC has alleged in its amended complaint against Payday Financial, LLC, a company that pitches its short-term, high-fee loans in TV ads and online.

It’s helpful when advertisers can get a window into the FTC’s thinking about certain ad claims — and five recent settlements with companies that sell replacement windows offer just that.

According to the FTC, the businesses made exaggerated and unsupported representations about the energy efficiency of their windows, and about how much money people could save on their heating and cooling bills by having them installed. What did the ads say? Things like:

Dot Com Disclosures — the FTC’s staff publication about online advertising — was published 12 years ago. Of course, the same basic consumer protection principles apply online, in mobile marketing, and in other media, but a lot has happened since then.  In light of technological changes, is it time for revised guidance about making disclosures required by FTC law?